6 Tips For Building Credit for the Future
I recently read an article on Trulia about six credit lessons that your parents didn’t teach you. Credit is so important when buying a home.
Paying interest is painful, so when it comes to improving your credit score, learning by example can save you lots of money down the road.
- Paying interest is one tough chore. The pain of monthly credit payments compounds when you top your monthly bill with interest payments. With many cards having an interest rate of 12%, missing a single payment can result in a large interest payment.
- When opening a new line of credit, try to negotiate rates. Even a 0.5% rate reduction matters.
- Fraud protection. Credit is the safest way to purchase between cash, debit, and credit. Most companies will remove fraudulent purchases as soon as you alert them to suspicious activity. Credit cards also cap your liability at $50.
- Credit doesn’t build itself. Be proactive, because a good credit score can save you a lot of money in the long run. Strong credit can get you a lower interest rate and empower you to make larger financial decisions, like taking out a mortgage.
- Credit limits aren’t suggestions. Being approved for $2,500 in credit doesn’t necessarily mean you have all that at our beck and call. Credit bureaus recommend spending only 30% of your credit line to prevent mixing it out.
- A financial philosophy can help make or break your credit score. It’s crucial to lock this down, because having an actionable plan can help guide you as you make decisions in your finances.
If you have any further questions about credit or credit building as it pertains to a home purchase, please feel free to give me a call or send me an email. I’d be happy to talk to you!
To read the original article, click here.